All transactions involving your 401k must be 'arms length'. 

Being the losing bidder on every opportunity means you never buy anything (whether it's SFR, MFR, a business, etc.). 

I have started a property management LLC company to manage these properties for myself and hope to grow that business as well. 

What is the specific process/documentation we need to go through to remove her from the LLC (can I do it myself or do I need to involve an attorney)? 

I’ve been involved in previous investments as the Director of Sweat Equity but I’m finally going drop the training wheels after years and years of just talking about it doing it and making a move!

Does anyone have any advice or references to setup the structure of the business so that we are compliant and that I can qualify for conventional financing while he puts up the equity.

There seems to be less risk involved, and more upside potential.  

HELPHow would you divide this Partnership so everyone is happy with their roles and involvement??

There are a myriad of reasons why, but the risk involved negates any profit potential for a traditional lender. 

If they do not qualify for conventional loans most private money are business purpose loans and require you to put it into an LLC